The Explosive Growth of Influencer Marketing

Published by: Tim Mischuk On

Value of Customer Voice?

The voice of the customer has always been one of the most powerful concepts in marketing, and today’s social media platforms act as one giant telephone for that voice.

In fact, social media has fundamentally changed the balance of power between customers and brands because it enables peer recommendations to play a much greater role in purchasing decisions. According to a McKinsey Study, marketing-inspired word-of-mouth generates more than twice the sales of paid advertising, and these customers have a 37% higher retention rate. Given the importance of peer recommendations and their amplification through social media, influencer marketing has become a widely discussed topic among marketers. This is especially true given the prevalence of influencers in the growing “millennial” and “mom” demographics.

Influencer marketing can be loosely defined as a form of marketing that identifies and targets individuals with influence over potential buyers. In the past, brands may have focused on popular bloggers and celebrities but today there is a new wave of “everyday” consumers that can have just as large an impact.

What is a Brand Influencer?

Currently, when a brand identifies influencers, they often look at number of followers that identity has on social platforms. However, in his famous book “The Tipping Point” Malcolm Gladwell calls out mavens (as he calls influencers) as people who also have a lot of knowledge about a topic. Influence isn’t just having a lot of followers. It’s also driven by expertise and credibility on subject matter and the relationship between the influencer and his or her followers.

Instead of simply looking at followers, a better equation for brands to consider is the following:

Influence = Audience Reach (# of followers) x Brand Affinity (expertise and credibility) x Strength of Relationship with Followers

MavenSocial has an algorithm scoring influencers on reach, brand affinity and strength of relationship.

maven-social-influencer-score

MavenScore (Reach, Economic Impact and Engagement)

Prototype of Influencers

Cross-section of Influencers (BDMI)

Platforms like Instagram and YouTube have led to the rise of a new generation of influencers that have amassed huge followings on niche subject matters such as fashion, beauty, and food. Recently MavenSocial employed through a partner a YouTube Influencer with over 70,000 followers – in a 5 day campaign period. This person (Regis Pere – fictitious name) drew in $4,300 net new eCommerce sales for a book eCommerce site from one post and delivered over 3,000 new email prospects.

InfluencerSales

On the other side of the spectrum are a brand’s “everyday” customers and brand advocates. It’s critical not to discount the combined influence of these customers on their own groups of followers.

Leveraging your brand’s influencers begins with building relationships with your customer. Given how frequently customers post about brands on social media, investing in a superior customer experience and service should be a priority. Show some love! This could include directly interacting with customers, providing promotional discounts, loyalty programs, or even creating a customer advisory board. By providing a superior customer experience and celebrating your customers, you will encourage more positive organic and authentic sharing about your brand. If you can find your own Regis Pere, and leverage that relationship to further foster a community.

Forbes, Sept., 2014, Kyle Wong is the founder and CEO of Pixlee